1. Chapter 5, Part 1 The TQM Philosophy

2. What is Quality?  What do we mean by quality?  Newer, more widely accepted definition of quality is the ability of a product or service to consistently meet or exceed the customer’s expectations.  This definition of quality is “customer driven.”

3. What is Quality?  Customer driven quality starts with having the customer determine the characteristics of a product or service that are important to them.  What are important characteristics of a  Cake?

4. What is Quality?  Technical support?  TV set?  Laptop?

5. What is Quality?  These characteristics are called quality characteristics.  To insure that they are set at the right levels, we need to quantify them.  We quantify them by having the customer impose acceptable numerical ranges or limits on their values:

6. What is Quality?  How sweet should a cake be?  It should have between ¼ and ¾ cup of sugar.  How moist can it be?  Moisture content can be between 13 and 15 grams.  The diameter of a steering wheel can be between 1.5 and 2.5 inches.  The weight of a laptop should be between 3.5 and 4.5 lbs.

7. What is Quality?  The limits on the product’s quality characteristics are called the product’s specification limits, or “specs.”  Some quality authorities define quality as producing units of a product that fall anywhere within the product’s spec limits.  These units are called conforming (to specs) or non-defective units.  Units that fall outside the specs limits are called nonconforming or defective units.

8. What is Quality?  Thus, according to these authorities, quality is the ability of a product to meet the spec limits.  Other authorities disagree and have a different definition of quality.  Later.

9. Evolution of Defect Prevention Mass or 100% Inspection Prevent defects before production Proactive- Fix the process Proactive- Design quality into product Statistical Process control Reactive- Fix the Product Prevent defects from being shipped Prevent defects from being produced Design of Experiments

10. Evolution of Quality Organizations Quality Dept. Action Plan for TQM Quality at the Source TQM No ownership of quality outside Quality Dept. Quality is responsibly of the Quality Dept. Quality is everyone’s responsibility Six Sigma Motorola, TI, GE Philosophy of making each worker responsible for his or her own work. Quality at the Source

11. Features of TQM – Table 5-3 Customer focusQuality is customer driven Continuous improvementPhilosophy of never- ending improvement Employee empowermentEmpower employees to find and solve quality problems Use of quality toolsBasic 7 – more later

12. Product designDesign products to meet customer expectations Process managementFix the process, not the product Managing supplier qualityWork with suppliers to insure that they processes are capable of shipping parts that meet your requirements. Features of TQM – Table 5-3

13. Old vs. New Views on Quality OldNew Quality costs too much Quality pays in form of lower cost:  Higher quality  Fewer defective units  Less rework  Less Scrap  Lower cost  Higher profit

14. Old vs. New Views on Quality OldNew Quality slows down production and therefore decreases productivity  Higher quality,  Fewer defective units,  Don’t have to use same inputs twice to make a good unit of product  Greater productivity Higher quality increases productivity

15. Old vs. New Views on Quality OldNew Quality is achieved through mass inspection (100% inspection) Short term contracts with suppliers Buy materials/parts from lowest bidder Quality is achieved by preventing defects, not detecting them. “Can’t inspect quality into a product.” Develop LT partnerships Buy based on quality, Not price

16. Old vs. New Views on Quality OldNew Have lots of inventory “Just in Case” Have lots of suppliers for each part– insurance policy Quality is production's or the quality department’s responsibility Minimize inventory- Just-in-Time (JIT) Quality is everyone’s Responsibility - TQM Have one LT partner supplier for each part

17. Old vs. New Views on Quality OldNew Quality is achieved by operating within specs -- conformance to specs (Zero Defects (ZD) policy of Phil Crosby) Quality is achieved by operating on target-- Taguchi. ZD is “goal post” thinking.

18. Specification Limits  Products can have  Upper and lower spec limits  Lower only – more later!  Upper only– more later!  LSL = Lower Specification Limit  USL = Upper Specification Limit

19. QC=Tread depth, inches Good units Defective units Defective units USL=.45LSL=.35 Zero Defects – Goal Post Thinking

20. Taguchi – Operate on Target Being on target is more important than being within the spec limits. Target value is the value of the quality characteristic, X, of a product or service that maximizes customer satisfaction. Any deviation from the target value imposes an economic loss on the customer, even if all product is within spec!

21. Taguchi – Operate on Target  Losses increase with increasing deviations from target.  Thus, Taguchi’s definition of quality is defined in terms of the losses imposed on the customer.  The smaller the loss, the greater the quality.  Zero losses occur when product or service is provided ???

22. LSL USL Amount of Toner Target Output That Is Always On Target X Variability = 0 Loss = 0 Units produced

23. LSL USL Amount of Toner Target Process That is Consistently On Target

24. LSL USL Amount of Toner Target Process That is Haphazardly On Target

25. LSL USL Amount of Toner Target Process That is Consistently Off Target

26. Target vs. Variability VariabilityOn TargetOff-Target High Low Haphazardly on target Consistently on target Consistently off target Haphazardly off target Robust quality.

27. Question  Is it better to have a process haphazardly on target, or a process that if consistently off target?  Before you answer, look at figure on next slide.

28. Who Would You Prefer to Go Hunting With? JaneSam

29. Target $ 0 LSLUSLX Loss Function – Process on Target

30. Target $ 0 LSLUSLX Loss Function – Process on Target k =2 k =8

31. X = quality characteristic T = Target value a = customer’s tolerance = half width of spec limits a = (USL – LSL)/2 LSL = lower specification limit = T - a USL = upper specification limit = T + a R = cost of repairing a unit that is at specification limits (given) How Do We Compute k?

32. T=target $ 0 X R T - a Loss T + a Loss Function – Process on Target

33. What is the loss when x = T + a ? How Do We Compute k?

34. Affect of k on the Loss Function  As R, cost of repair, increases, it becomes more costly to repair units prior to shipping.  This will increase k.  Increases in k increase the losses due to deviations from target.

35. Affect of k on the Loss Function  As a increases, k decreases, and so do the losses at all values of X.  An increase in a means that the customer’s tolerances are wider, meaning that the acceptable range of product performance has increased.  The wider the range of acceptable performance, the lower the losses due to deviations from target.

36. Given T = 10, a = 3, R = $20, what is the loss function? Example

37. Solution

38. T=10 $ 0 X R= 20 7 13 Graphical Display of Solution

39. Computing the Losses x 0$220 5$55 100 15$55 20$220

40. Target 0 Good units Defective units Defective units USLLSL Find the Loss Function for the Zero Defects Model

41. Solution

42. Target= Mean Expected Loss-Process on Target $ 0 X Process Distribution Loss

43. Expected Loss – Process on Target E(Loss) = Sum of ($Loss x Probability of Loss) σ 2 = Variance of X

44. Expected Loss – Process on Target 1. If the variance = 10.2, the repair cost = $32, and a = 4, what is the expected loss? k = R/a 2 = 32/4 2 = 2 E(Loss) = k σ 2 =2(10.2) = 20.4 2. Explain meaning. The company can expect to impose on the customer a loss of $20.40 per unit shipped.

45. Target= Mean $ 0 Expected Loss – Process on Target Process on Target, Little Variation, Small Expected Loss

46. Target= Mean $ 0 Expected Loss – Process on Target Process on Target, High Variation, High Expected Loss

47. Taguchi’s Quality Characteristics  Bigger is better  Target value =?  Smaller is better  Target value=?  Nominal is best (NIB)  Target=(LSL+USL)/2

48. Provide an Example of Each  Bigger-is-better  Smaller-is-better  Nominal-is-best

49. Repair or Ship?  It may be more better for a company to ship some off target units without repairing them to target, depending on how far off target they are.  For other off target units, it may be better to repair them prior to shipping.

50. T=target $ 0 Ship as is R T - a L T + a Repair Taguchi’s “Repair or Ship” Rule

51. T=target $ 0 Ship as is R T - a Loss T + a Repair Taguchi’s “Repair or Ship” Rule Fraction defective Fraction defective

52. Taguchi’s “Repair or Ship” Rule  Explain the logic supporting the decision to ship units “as is.”  Explain the logic supporting the decision to repair units prior to shipping.

53. Taguchi’s “Repair or Ship” Rule  What does rule assume?  If a company is using Taguchi’s rule, when can it stop doing ?????